Think of a sneakier way to give people discount codes that doesn't show it RIGHT THERE ON THE FORM. It makes me feel like I'm getting ripped off when I see discount code and I don't have one.
I do appreciate discounts, but don't feel entitled to them, especially if I'm a first time customer (or opted out of marketing emails). But maybe I'm an outlier and a sense of entitlement is the norm these days.
I understand these discounts are designed to promote frequent patronage in some cases. But it can definitely piss customers off.
And yes I deliberately said normal pricing, the only study that has been done of before and after pricing once loyalty cards were introduced showed that prices are just inflated such that the loyalty card brings them back into line. Best to just shop somewhere without loyalty cards at all.
I have exactly the same thing with the £1.50 for one/£2.00 for two type offers. If I don't want two of them, the very fact that they are highlighting that they are happy to sell them at £1 each makes the £1.50 price look like a rip off, especially if they've put the single unit price in smaller text (it says to me "yes, we'll sell you just one if you really, really want - but we're charging you a massive premium for doing it). I sometimes find myself not buying the item at all as a result.
Our clients just have to mention in their marketing material to their customers 'gift voucher code' rather than 'coupon code'.
edit: downvoted, sigh. ok. I'll elaborate. When you give me a discount code field on your checkout page, I automatically open up a new tab and Google around for "your site name discount code". If I can find one that works, you're just losing money for absolutely no good reason. I would've happily checked out without ever thinking of saving 5% on my $50 purchase. (c'mon, $2.50? That's not even a latte!) But, now, I'm obsessed, and I go back into 'bargain hunter' mode. If you're really unlucky, I'll find another site that undercuts you without a discount field, and just use them.
Save yourself the trouble. Apply a coupon via a cookie from a special landing page. I'll feel excited and grateful if one is applied for me at checkout and I won't even think of shopping around any more if I don't have one.
Affiliates will call after the sale asking to proactively apply discount codes (so they get credit).
Customers will complain if a discount code has expired.
Customers will cancel, return and re-buy just to apply discount codes.
Discount codes suck.
> Regular customers of Kogan know that our products are ALWAYS discounted. Very rarely do we release a Kogan Discount Code or a Kogan Discount Coupon
The #1 result? A scammy looking site but don't worry because "59 people have used this today!" (unsuccessfully of course)
'Sorry, we can't find the page you're looking for'
You get, however, annoying pop-up window if you access this URL …
Kogan had some wild expectation that the majority of affiliate traffic would be first-time visitors to his site. When he uses google analytics to estimate that only 1.6% of referrals were new customers, he trashes affiliate marketing as a business.
Unfortunately, he spent no time thinking about how to optimize his campaign to reward affiliates for first-time customers, among other things.
Perhaps an "experienced affiliate marketing user" might get different results, but if you're suggesting that a business who'll mislead you and rip you off happily unless you're a sophisticated-enough user of their service deserves a "trashing" any less than used car salesmen deserve their reputation – I think you're wrong. If _you_ come to me knowing your proposal involves you taking 10% commission on sales - where 98.4% of those sales were mine already, I'd call you out as a thief.
I am sure that Kogan has been in business long enough to know not to take what a low-level sales person preaches as fact. Just like Kogan, the sales person also didn't seem to have a clue about affiliate marketing. And, why should he if he can sign new clients who will drop $40K out of the gate?
A question though, from someone who's inexperienced but very cynical about affiliate marketing – it that sort of option/complexity; to offer very low commissions for return visitors but large commissions for first-timers, actually available through the sort of "affiliate networks" you'd find by searching online?
No, quoting actual sales volumes, conducting experiments with different commission rates, and measuring and reporting on new customer traffic take this from a newbie's anecdote to a useful, insightful article.
You have someone in your checkout process. Why on earth would you give them a reason to leave that process and go search for a discount code if you know they won't find any? Assuming they will come back doesn't feel right. What if their search for a discount code didn't prove there wasn't one, but did prove a competitor was going to be a) cheaper, b) a better service, c) offering discount codes, or they got distracted by cat videos on YouTube.
And maybe I'm naive here, but since adding affiliate marketing, if the revenue was going to be guaranteed anyway, wouldn't there be a drop in $200,000 from the regular revenue?
Why have a checkout process where you are going to send a non insignificant percent of your users on a wild goose chase, possibly annoying them and/or distracting them when they were about to buy a product. Then blame your affiliates for "scamming" you. It doesn't make much sense.
For a client of mine we added a discount code box to the checkout and got a surge of calls from people asking how to get a discount code. It was actually intended for some multi-channel marketing.
We now don't have discount codes in the checkout process.
Where did the extra $200K in sales come from and why is he not happy about it? It sounds like there is a pool of customers that will not finish the purchase unless they can google "kogan coupon" and hit few coupon sites beforehand (even if to leave these sites emptyhanded). So the affiliates appear to help convincing on-the-fence visitors and push sales to completion. If anything, it's a clever hack. Not sure why he's so pissed.
And since they don't actually give out a coupon, it's doubtful it helps anyone but the affiliates.
The article does not explain this. What evidence suggests that those customers would have completed anyway, and has this only displaced revenue rather than increased it.
By simply testing different pricing models the author observed this demand anomaly, which leads him to uncover the platform's modus operandi.
I just wanted to point out that that part of the story is not that clear/well explained.
How did the affiliates manage to steal these customers? It seems to me like your referral tracking is massively broken.
Does that mean you have to fully trust the affiliate with how many referrals they claim to have made?
Like someone else said earlier, the order process is broken by encouraging users to leave the website and potentially forget the order.
I was all settled in for a sordid tale of intrigue or some yarn about a clever heist. I could spin a few of those stories myself.
But, of all the things this guy picked on, it's that his traffic is searching for discount codes and coming back with an affiliate tag? This is not a scam. It's perfectly legal and anyone wading into affiliate marketing should do his research and understand how it works. It's not just activating a magical digital sales force. Like any other marketing, it needs to be understood, researched, and applied to the business properly (or decided that it is not a good fit for the business).
The first tell-tale sign is that he didn't even know who his affiliates were. He just blindly flipped the switch. He could (and clearly should) have hand-picked his affiliates and worked with them to cultivate the activity he desired. It's ridiculous to blindly open the flood gates and complain about what comes floating in, then declare the whole affiliate marketing space one tremendous scam.
Even now, this is so easily fixable and could really be used to his advantage. His customers are telling him exactly what they want. He also knows where they are going to search for discounts. One supremely simple step would be to start creating and marketing the codes himself to his current customers. Let them know that the best codes are sent to their appreciated customers. Another step would be to cull his affiliate partner list to those where his users (and presumably others like them) are actually going to find his codes. He should also start by working with his account manager on the network (assuming he sprung for one) to devise a strategy around his goals. For instance, on all major networks, he can explicitly indicate that his affiliates cannot engage in keyword bidding or search engine marketing.
There's not enough space here to get into it. I understand his frustration, but he is being irresponsible and reckless in making the generalized statements he's making.
Those are three of the most utterly basic things any new affiliate program would do.
His real complaints should be that he lacks knowledge in this area, didn't hire people who have it, and got poor customer service from his affiliate program.
He could've easily shut down all of that activity or even experimented with it in a controlled fashion with select affiliates, getting near-immediate feedback and optimizing (or then deciding against it).
same here, i was waiting for a juicy tale. there is plenty of scams and dodgy stuff going on the affiliate world. this isn't one of them.
Manually approve affiliates that will add value, remove affiliates or don't approve affiliates who are going to advertise non-existent coupon codes. The end, don't treat an affiliate campaign as an easy money button.
edit: And they also seem perplexed that affiliates kept sending $200,000 in sales no matter the commission. True evidence they had no knowledge of how affiliate sites work. If they're performing well, webmasters can essentially set them and forget them. It's not like they're actively working 8 hours a day pushing sales, it can be a static website that never changes as long as the revenue is steady for the affiliate.
We need a Rapgenius for online discount codes. Right now, it's full of scummy, crappy sites (just like lyric sites), but could be easily improved with a simple interface, minimal advertising, and collaboratively sourced content.
While I think we can definitely do better (the data is pretty sparse in some areas), I believe the collaborative / real time validation approach will lead to a better experience for shoppers.
The affiliates didn't do anything wrong here, which was ironic, because I've met affiliate marketers at conferences in Vegas, and there's PLENTY of shady stuff that some of them do. That said, none of that is taking place here.
Ranking for "name of company I'm an affiliate for" discount code is practically step 1 on the affiliate SEO checklist. This post was almost comically misleading, to be candid.
We also a long time back went down the road of paying a network a lot of money based on their promises of the type of affiliate sales they could provide. The traffic was horrible, generated a ton of fraud when there actually were sales and the program was canned after probably only 100 sales. So definitely would stay away from any major investment with an affiliate network.
That being said there are good affiliates out there (like to think I have been one myself promoting products rather than ecommerce brands) that will deliver great customers. Likely though you will have to do the leg work to find them, they won't just join your program.
If anything, this should be read as an educational piece for consumers about who is really making money when you search for discount codes online, rather than outrage at the affiliate marketing world.
That's interesting. Here's an article by someone you don't know and, within the first paragraph, you are "incredibly skeptical". I think most people's normal reaction would be to give the guy the benefit of the doubt - after all, it's the first paragraph and that person knows a lot more details about their business than the first paragraph will give away. I think most of us would read that line in the beginning, file it away for verification/thinking as we read the article, then revisit that after we've been presented much more of the article. For you to color your view so easily and quickly is interesting - it's almost akin to someone walking around "looking for a fight".
That's exactly what skeptical means.
Affiliate marketing can be a great way to make sales - think about it this way: you pay the network, which in turn pays the affiliates say 20%. These affiliates then use their own methods (their own sites, Facebook ads, AdWords, forum posts, a lot of stuff that you'd normally never think of) to drive traffic. They do all the marketing and you make sales - the only thing they don't do is manage your brand, if you are worried about that you're better off without affiliates online.
The funny thing is if you forbid affiliates to have discount codes/coupons, affiliate marketing is not worth it at all. It's only the loopholes that keep affiliate marketing as profitable as it is right now. I mean who in their right mind would want to exert effort to bring traffic where .01% of it converts just for a measly 5% commission? No. You have to cheat a little to make it worthwhile.
The proper way to introduce affiliate campaigns to your product / service is to succeed using paid advertising in-house. You need to establish your typical CTR, EPC, CPA, LTV, bounce rate, for different channels. Restrict the channels that affiliates use. Once you have your baseline, you can look at the numbers for each individual affiliate to determine their numbers stack up against your baseline. There are a lot more details that can't fit into an HN comment made on my way to work heh.
One concrete example, so it's more tangible. If you don't explicitly restrict pop up traffic, affiliates can pop and drop their cookie when someone with adware installed visits your domain.
Edit: This story is very one sided. Sure the marketing consultant was probably sleazy, and the affiliate marketing tricks were unethical, but the op did not even do basic due diligence. If I were the op, I would at least look at how the affiliate marketing programs of other mature ecommerce sites were set up. Amazon for instance has an affiliate fee of 4% on electronics. Paying 10% instead of 4% as affiliate fees is a red flag. Amazon payouts are made 60 days after the marketing period, where they can conduct their fraud analysis. Also you should be paying very close attention to their operating agreement which outline what does and does not earn you an affiliate fee.
Seeing stellar results so far with plenty of feedback for improvement (we're in beta). If anyone is interested in helping us test the concept further, hit me up!
When getting involved with aff-networks I have noticed that there are quite a lot of 'low quality' (of course depending on your needs) networks around that basically lure people into visiting your site, other than referring truly interesting people to you. That seems like business 1-0-1, but it really amazed me how many large networks use shady landingpages with obscure lotteries and other 'prizes'. (This was a about 2-3 years ago, but still..)
Always do a small run first, track what's happening and why and always be suspicious about people 'selling' you other people's data/attention (data-pushers, is what I used to call them) because that's basically what is is, to some extend.
I remember posting coupon codes to their site and having them being taken down constantly because they weren't getting commission on them. They were original company specials so no affiliate was getting paid (including me) but I posted them merely for the people who were searching could save money. They gave users 50% off hosting and the links on the retailmenot page were simply regular links to the products page disguised as specials.
When I emailed them asking why they keep deleting my posted coupon they said that any specials need to be run through them and they need a way to track aka put their affiliate id on them.
Left a bad taste in my mouth.
Remove the field, not the affiliates
If managed properly affiliate marketing definitely works and yes, it's worth expanding to.
Was there sales growth of 200K or not? Yes/No - it's that simple.
It seems like this would be the main thing to look at.
But instead the post goes into hypothesis - almost like either:
A) The answer is so blatantly No that it does not need addressing.
B) He's trying to sweep the above question away because he dislikes the idea of Affiliates driving previous visitors back for more business.